With churn rates on the rise, and expected to increase further in the coming year, Omdia’s Max Signorelli explores how streaming services can keep seasonal subscribers coming back as paying customers.
Across all markets sampled by Omdia Consumer Research, churn rates are at an all-time high. Half of consumers claim to have cancelled a video service in some way in the last 12 months.
Meanwhile, paid subscription video service stacking is slowing down, growing by just 3% between April 2023 and November 2023, compared to 11% a year earlier. When considering subscription video services lost to churn, this video service stack could be as much as 25% higher.
Churn can be avoided, but not entirely – there will always be a reason for users to take time away from a subscription. Operators and services must embrace the seasonal nature of consumption to attract consumers that are more valuable longer term.
Churners are more engaged with media than completely loyal consumers, reflecting their heightened active engagement with their media services. They use 34% more video services on average and are also more engaged with other media sectors, making them much more valuable overall.Impact & mitigation
Churn is typically considered an entirely negative aspect of media service consumption. However, if seasonal users are guided appropriately there is a greater chance they will return in the future, facilitating longer-term engagement.
Operator should consider the consumer’s needs by looking at their engagement with a platform holistically. These total usage patterns are more telling of long-term intention than any unseasonal or static media service users ever could be.
Consumers are also not able to subscribe to everything simultaneously. They will move between what satisfies their evolving needs at a given time. There may be gaps in their tenure with any one service, but with the correct motivation they will return.
Although retaining consumers for as long as possible is still the priority, it must be done without subjecting them to longer-term service fatigue. Beyond this, platform bundles and device integration offer vital insights into understanding the full consumer journey.
The excerpt above comes from Omdia’s ‘2024 Trends to Watch: Connected Consumers’, by Max Signorelli, Principal Analyst, Media & Entertainment, which can be read in full here. Omdia and TBI are both part of Informa Tech.